John McDonnell MP said initiatives being run by the city council to drive up local spending and working with the local Chamber of Commerce were a ‘new economics’.

He said in Manchester last week: “Preston, has developed an extensive programme of work. Preston was one of the councils facing the very sharpest cuts to its funding out of any in the country. But they are responding creatively.

“They have got major local employers and buyers like the University of Central Lancashire – to drive through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally.

“They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston.

“And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands.

“It’s inspiring to see Labour councils responding to profound challenges like this.”

Councillor Matthew Brown, cabinet member for social justice, inclusion and policy, said: “We are delighted the new economics we are promoting in Preston and Lancashire has received a big mention in the Shadow Chancellors groundbreaking speech last Thursday in Manchester.

“Considering the current austerity programme is directly linked to the huge amount of public wealth needed to bail out the financial system Labour has been quietly working to build an alternative economics locally for some time.

“Working with the Centre for Local Economic Strategies (CLES) we are changing the culture of a number of large placed based institutions in Preston and Lancashire who are repatriating their spend on goods and services to the local economy to support jobs.

“We are committed to expand the number of worker owned businesses in Preston and use our influence as a member of Lancashire Pension Fund to persuade them to invest more in the local economy as they have done already with the student accommodation scheme in Friargate.

“We are the first local authority to support the “Move Your Money” campaign to encourage people in Preston to shift their money to ethical providers and we have a new city wide credit union “Guild Money” to provide affordable loans and ethical savings.

“Finally, we have actively promoted the living wage with at least 50 employers accredited in Preston which especially benefits women who are often in part time employment.”

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